Report: Sony Could Post $1.1 Billion Loss for 2008


Posted January 13, 2009 - By bleahy

According to reports, there could be a significant loss in Sony's future. Instead of the predicted $2.2 billion profit for its 2008 fiscal year (which ends on March 31st, 2009), Sony could post a loss of $1.1 billion.

The report comes from the Nikkei Business Daily which was picked up by Reuters. This possible profit loss could make the planned restructuring get completed earlier than March 2010 -- which would cut 4% of Sony's workforce or 9000 jobs.

This would be Sony's first posted loss in 14 years and only its second publically reported loss ever. Ouch.

While Sony Computer Entertainment, the division that is responsible for the PlayStation brand, struggles to reestablish profitability, SCEE President David Reeves, believes that SCE will be excluded from the restructuring of the company.

The PlayStation 3 sold fewer units in November 2008 than in November 2007. Nintendo and Microsoft both posted year-over-year growth when compared to 2007.

With regards to additional layoffs, Sony Japan spokesperson Atsuo Omagari, brushed the notion aside, saying, "We do not plan to announce additional restructuring measures at this time ... we don't have any such plan."

It looks like 2009 will be very important for Sony, but especially for the PlayStation 3. There are several promising exclusive games planned for release this year, but Sony might need a price-cut to get people to pick up the console for those games. Now that Blu-ray players have dropped to half the price of the PS3 in some cases, Sony needs to market the PS3 as a gaming machine first.

For me, marketing strategy is the biggest difference between Microsoft and Sony. Microsoft spends a lot of money marketing the Xbox 360. Aaron Greenberg, revealed that Microsoft ran a marketing campaign in Europe on the same level as a console launch and they managed to establish a one-million unit lead over the PS3.

Sony tends to prefer abstract commercials which are unique and interesting, but don't really show off their games and products. Sony put up a giant building-sized poster for Resistance 2 here in Los Angeles, but where was its midnight launch event? Come on, Sony. Tell us why we should spend $400 for your console over $200 - $300 for a competing product.

What do you think led to the PS3's poor performance during the holiday 2008 season?


Report: Sony Could Post $1.1 Billion Loss for 2008


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